This article is for our India readers. Lately Payments Banks have become the latest fin-tech trend in India. The Reserve Bank of India granted a license for 11 brand entities to create payment banks. The main purpose of these banks is to target first-time account holders making the process simple and the benefits, lucrative.
Now, before you rush to open your own payment bank account, here are four essential pointers you need to know to make a smart decision:
Payment Banks offer you Interest
As a step over digital wallets, payment banks now offer a varied rate of interest to customers. This is a move to align them with more traditional bank services so that even for first time account holders, their money is not idle but continues to earn interest. Current rates of interest are 7.25% from Airtel payment bank, 5.5% from India Post and 4% from Paytm Payments Bank.
Current rates of interest are 7.25% from Airtel payment bank, 5.5% from India Post and 4% from Paytm Payments Bank.
Upper limit on Deposits
While there is no minimum deposit/balance on accounts, in payment banks, there is a maximum cap of 1 Lakh deposit limit.
Ease of use
The main USP of payment banks is that it is a paperless, tech-focused making it easier to start an account. Services like Paytm payment bank offer on-ground services such as cheque books, free email statements and online passbook.
India Post offers special services such as doorstep banking – cash withdrawal and deposits up to Rs.10,000, and these visits are chargeable.
These accounts work directly from your mobile phone, making it simple to track and make payments.
Offers and discounts
Most payment banks have tied up with brands and online portals to offer discounts and cash backs to entice first-time online shoppers.
Therefore, when looking for a payment bank that is the right fit for you, take a look at the brands they have tied up with and see if they interest you.
Now that you know these four important pointers, it is also vital to acknowledge that these banks cannot permanently replace traditional banks, you must also consider fully digital bank accounts such as digibank by DBS and Kotak 811.
digibank is a full bank offering more services and benefits such as a virtual assistant and an expense tracker. Let’s compare digibank to payment banks like Airtel Payment Banks, India Post and Paytm.
|Type||digibank||PayTM Payments Bank||Airtel Payments bank||India Post Payments|
|KYC||eKYC with Aadhaar and biometric||eKYC with Aadhaar and biometric|
|Upper Limit||No limit||Max Rs.100,000||Max Rs.100,000||Max Rs.100,000|
|Debit Card||Free Visa debit card||free for 1st year||No physical debit card||free for 1st year|
|ATM Withdrawals||Free unlimited ATM
|three free withdrawals in metros, five free in non metros||0.65% charge / withdrawal.||three free withdrawals in metros, five free in non metros|
As you can see from the table above, digibank is a clear winner when it comes to main features such as debit card, rate of interest ( the only one higher is Airtel, that comes with various hidden charges and ATM withdrawals.
Further, it is backed by DBS which is one of the most revered and safe banks in the world, making it a no-brainer to choose digibank rather than a payment bank for your first experience of the fin-tech revolution.